WAFD, Inc. (NASDAQ: WAFD), the parent company of Washington Federal Bank, has reported its second quarter fiscal 2024 results following the successful completion of the merger with California-based Luther Burbank Corporation (LBC).
Earnings for the quarter ended March 31, 2024, were $15,888,000, a significant decrease of 73% from the net earnings of $58,453,000 for the quarter ended December 31, 2023, and a decrease of 76% from the net earnings of $65,934,000 for the quarter ended March 31, 2023. Net income available for common shareholders was $0.17 per diluted share for the quarter ended March 31, 2024, compared to $0.85 per diluted share for the quarter ended December 31, 2023, a decrease of 80%, and $0.95 per diluted share for the quarter ended March 31, 2023, a decrease of 82% in fully diluted earnings per common share.
Return on common shareholders' equity for the quarter ended March 31, 2024, was 2.09%, and return on assets was 0.26%. Adjusted for merger-related costs and certain non-operating expenses, return on common shareholders' equity for the quarter ended March 31, 2024, was 8.7%, compared to 10.21% for the quarter ended December 31, 2023, and 12.01% for the quarter ended March 31, 2023. Adjusted return on assets for the quarter ended March 31, 2024, was 0.9%, compared to 1.0% for the previous quarter and 1.2% for the same quarter in the prior year.
Total assets were $30.1 billion as of March 31, 2024, compared to $22.5 billion at September 30, 2023, primarily due to the addition of $7.7 billion of LBC assets at fair value on February 29, 2024. Net loans held for investment increased by $3.3 billion, or 19.0%, from September 30, 2023, to March 31, 2024, reflecting the addition of LBC loans with a fair value of $3.2 billion.
Customer deposits totaled $21.3 billion as of March 31, 2024, an increase of 32.8% since September 30, 2023, due to $5.6 billion in deposits obtained in the merger. Borrowings totaled $5.3 billion as of March 31, 2024, up from $3.7 billion at September 30, 2023, with $1.4 billion attributable to the merger.
Loan originations for the second fiscal quarter of 2024 were $0.8 billion, compared to $1.0 billion of originations in the same quarter one year ago. Commercial loans represented 77% of all loan originations during the second fiscal quarter of 2024, and consumer loans accounted for the remaining 23%.
Net interest income was $159 million for the second fiscal quarter of 2024, a decrease of $16.4 million or 9.4% from the same quarter in the prior year. Total other income was $13.4 million for the second fiscal quarter of 2024, compared to $10.1 million in the prior year same quarter. Total other expense was $133.7 million in the second fiscal quarter of 2024, an increase of $36.8 million, or 38.0%, from the prior year's quarter.
The company's efficiency ratio in the second fiscal quarter of 2024 was 58.5%, compared to 58.0% in the prior quarter and 52.3% for the same period one year ago.
WAFD Bank operates in nine western states and has engaged in a rapid acquisition and integration process, demonstrating a significant increase in total assets and customer deposits. However, the company has also experienced a decline in earnings and return on equity following the merger. The market has reacted to these announcements by moving the company's shares 1.7% to a price of $28.59. Check out the company's full 8-K submission here.
